Brazil arrests man with SembMarine link, The Straits Times 31 May 2015

http://business.asiaone.com/news/brazil-arrests-man-sembmarine-link

Jacqueline WooThe Straits TimesTuesday, Mar 31, 2015 

A man linked to Sembcorp Marine’s oil rig construction contracts in Brazil has been arrested on bribe-related charges.

He is connected to the companies engaged by SembMarine as consultants for its contracts for Sete Brasil, a subsidiary of state- owned energy giant Petrobras.

The arrest by the Brazilian authorities last Friday followed allegations made by a former engineering manager at Petrobras, according to a SembMarine statement yesterday.

Petrobras is embroiled in a massive scandal, following claims last month that it was involved in a bribery scheme.

SembMarine and Keppel Corp were included in the allegations. Both have denied wrongdoing.

SembMarine said it has initiated an internal investigation and engaged lawyers, and it cannot comment on the allegations as its own investigations are ongoing.

“The company and the group have a strict anti-bribery policy and do not condone any action that will result in the violation of any country’s anti-corruption laws,” said SembMarine.

“The company and the group also do not and will not tolerate any improper business conduct.”

SembMarine’s shares continue to take a hit in the wake of the scandal, shedding four cents to close at $2.93 yesterday. This is well down from its peak this year of $3.29 on Jan 2.

Analysts are cautious on the firm, especially as almost half of its order book is believed to be from Petrobras and Sete Brasil.

The scandal, coupled with the overall weakness in global oil prices, is likely taking its toil on SembMarine, noted CIMB Securities analyst Lim Siew Khee, who downgraded her call on the firm from “add” to “sell” yesterday.

OCBC Investment Research’s Low Pei Han has a “hold” rating on SembMarine following yesterday’s announcement.

Meanwhile, SembMarine yesterday said a new contract is in the works for its wholly-owned subsidiary Jurong Shipyard.

Jurong Shipyard has entered into a letter of intent with Heerema Offshore Services to build a semi-submersible crane vessel.

Heerema Offshore is a subsidiary of global marine contractor Heerema Marine Contractors Nederland Holding SE, which is based in the Netherlands.

The vessel, which will install and remove offshore facilities, is set to be the largest of its kind in the world, said SembMarine.

tsjwoo@sph.com.sg

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